Correlation Between HansBiomed and KT Submarine
Can any of the company-specific risk be diversified away by investing in both HansBiomed and KT Submarine at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining HansBiomed and KT Submarine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HansBiomed and KT Submarine Telecom, you can compare the effects of market volatilities on HansBiomed and KT Submarine and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in HansBiomed with a short position of KT Submarine. Check out your portfolio center. Please also check ongoing floating volatility patterns of HansBiomed and KT Submarine.
Diversification Opportunities for HansBiomed and KT Submarine
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between HansBiomed and 060370 is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding HansBiomed and KT Submarine Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Submarine Telecom and HansBiomed is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on HansBiomed are associated (or correlated) with KT Submarine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Submarine Telecom has no effect on the direction of HansBiomed i.e., HansBiomed and KT Submarine go up and down completely randomly.
Pair Corralation between HansBiomed and KT Submarine
Assuming the 90 days trading horizon HansBiomed is expected to under-perform the KT Submarine. But the stock apears to be less risky and, when comparing its historical volatility, HansBiomed is 1.51 times less risky than KT Submarine. The stock trades about -0.17 of its potential returns per unit of risk. The KT Submarine Telecom is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 1,805,000 in KT Submarine Telecom on August 28, 2024 and sell it today you would lose (384,000) from holding KT Submarine Telecom or give up 21.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HansBiomed vs. KT Submarine Telecom
Performance |
| Timeline |
| HansBiomed |
| KT Submarine Telecom |
HansBiomed and KT Submarine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HansBiomed and KT Submarine
The main advantage of trading using opposite HansBiomed and KT Submarine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HansBiomed position performs unexpectedly, KT Submarine can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in KT Submarine will offset losses from the drop in KT Submarine's long position.| HansBiomed vs. Dong A Steel Technology | HansBiomed vs. Puloon Technology | HansBiomed vs. Woori Technology | HansBiomed vs. FoodNamoo |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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